The European Central Bank (ECB) announced plans for stress testing, and risk reviews, of large banks in the region, in an effort to bolster transparency and market confidence.

The ECB said Wednesday that large European banks will undergo a risk assessment, asset quality review, and stress test, starting in November. The exercise is expected to take 12 months.

The assessments are being conducted in preparation of the central bank assuming full responsibility for bank supervision in November 2014. It says these reviews represent “an important step in the preparation of the single supervisory mechanism and, more generally, towards greater transparency of the banks’ balance sheets and consistency of supervisory practices in Europe.”

The ECB says that the exercise has three main goals: to enhance the quality of information available on the condition of banks; to identify issues, and implement necessary corrective actions; and, to build confidence in the stability of the banks.

The assessments will consist of three closely-related elements: a quantitative and qualitative review of key risks, including liquidity, leverage and funding; an asset quality review, including the adequacy of asset and collateral valuation and related provisions; and, a stress test to examine the resilience of banks’ balance sheets to stress scenarios. The details of the stress test will be announced at a later stage, in coordination with the European Banking Authority.

The ECB intends to publish the results of the exercise, at the country and bank level, together with any recommendations for supervisory measures, ahead of it taking over bank supervision.

“A single comprehensive assessment, uniformly applied to all significant banks, accounting for about 85% of the euro area banking system, is an important step forward for Europe and for the future of the euro area economy,” said ECB president, Mario Draghi. “Transparency will be its primary objective. We expect that this assessment will strengthen private sector confidence in the soundness of euro area banks and in the quality of their balance sheets.”